Excepted estates - if the death was between 6 April 2002 and 5 April 2004
An 'excepted estate' is an estate where no Inheritance Tax is due. Although there are forms to complete, a full Inheritance Tax account
(form IHT400) isn't required.
On this page:
What qualifies as an excepted estate?
If the deceased person died between 6 April 2002 and 5 April 2004, the estate will generally be an excepted estate if one of the following
applies:
- it's a low value estate (see more below)
- the deceased person was a 'foreign domiciliary' - they lived permanently abroad and died abroad and the value of their UK assets was less than
£100,000
This means if you're a personal applicant you'll probably need to fill in form IHT205 Return of Estate Information (or form C5 in Scotland)
as part of the probate process. If you're a solicitor you only need to swear the oath.
Find out about Inheritance Tax if the deceased person was domiciled abroad
Top
What is a low value estate?
To qualify as a low value estate, the estate must meet all the following conditions:
- the value of the estate wasn't more than the excepted estate limit for the year of death - see the table below
- any assets that the deceased person benefited from that were held in a trust, were in a single trust and the value was less than £100,000
- the value of any assets held outside of the UK was less than £75,000
- the value of any 'specified transfers' was less than £100,000 (see the section on specified transfers below)
- the deceased person hadn't made any other gifts within seven years of their death that weren't specified transfers
- the deceased person hadn't made any gifts that they continued to benefit from - these are known as 'gifts with reservation of benefit'
(see the section on gifts with reservation of benefit below)
- the deceased person had made the UK their permanent home - they were 'domiciled' in the UK when they died
Limits for low value estates
6 April 2002 and 5 April 2003 |
£220,000 |
6 April 2003 and 5 April 2004 |
£240,000 |
Top
What is a specified transfer?
Specified transfers are gifts the deceased person made during their lifetime that were either:
- cash, quoted shares or securities
- straightforward gifts to an individual of land, together with furnishings and contents enjoyed with that land (but not gifts into trusts)
Top
What is a 'gift with reservation of benefit'?
If the deceased made a gift to someone and still continued to benefit from it - such as a house they gave away but still continued to live
in - it is considered a gift with reservation of benefit, and counts as still being part of their estate for Inheritance Tax purposes.
Passing on your home to your children
Top
